New Downtown Arena

[dankrutka]

I hope that the outside area of the arena is activated in a way that creates an active, dynamic, walkable atmosphere outside of games/events, not a dead zone most of the time. My understanding is that Milwaukee did this well with their arena so it seems that's likely.

[Teo9969]

no the value of the team or sports teams in general don't really have anything to do with profit ..

It absolutely has to do with revenue. Profit fluctuates as with any business, thus gross revenue plays a large part in valuation.

[Teo9969]

$250M+ in revenue is why the org is valued at $2B. That's stable, recurring revenue. Look at how tech companies with similar recurring revenue models are valued as a percentage of their revenue vs. profits. It's not just a toy.

[BoulderSooner]

It absolutely has to do with revenue. Profit fluctuates as with any business, thus gross revenue plays a large part in valuation.

i didn't say anything about revenue

[Laramie]

Forbes: Oklahoma City Thunder #24. $1.875 billion

INTANGIBLES . . .

What kind of significance do sports serve? This research project will investigate further into one of the many different answers to this broad question, specifically in the economic sense. Exactly what kind of impact can a single sports team have on a single city’s economy?. .

. . . NBA’s Thunder to Oklahoma City is significant because it measures the above mentioned economic impact in a homogeneous economic environment - one that is characterized as a recession.

The primary argument in making this hypothesis is that the presence of the Thunder to Oklahoma City would prove to be a good driver of talent, wealth, and intellectual accumulation to not only the city but the state as a whole while complementing job creation as well as boost the region’s tourism sector and thus the overall state of the economy all the while leaving the city which was abandoned by the franchise (in this case, Seattle severing ties with the Supersonics) with a sizeable financial, capital, and intellectual hit.

Good read: Sports Economics - The Economic Impact of the NBA's Thunder on Oklahoma City. https://scholarworks.uark.edu/cgi/vi...ontext=econuht

405 Magazine Oklahoma City’s Thunder BOOM! https://www.405magazine.com/oklahoma...-thunder-boom/

[PoliSciGuy]

Forbes: Oklahoma City Thunder #24. $1.875 billion

INTANGIBLES . . .

What kind of significance do sports serve? This research project will investigate further into one of the many different answers to this broad question, specifically in the economic sense. Exactly what kind of impact can a single sports team have on a single city’s economy?. .

. . . NBA’s Thunder to Oklahoma City is significant because it measures the above mentioned economic impact in a homogeneous economic environment - one that is characterized as a recession.

The primary argument in making this hypothesis is that the presence of the Thunder to Oklahoma City would prove to be a good driver of talent, wealth, and intellectual accumulation to not only the city but the state as a whole while complementing job creation as well as boost the region’s tourism sector and thus the overall state of the economy all the while leaving the city which was abandoned by the franchise (in this case, Seattle severing ties with the Supersonics) with a sizeable financial, capital, and intellectual hit.

Good read: Sports Economics - The Economic Impact of the NBA's Thunder on Oklahoma City. https://scholarworks.uark.edu/cgi/vi...ontext=econuht

This paper seems to confirm that the Thunder don't really have a big economic impact on the city. In fact, he finds that his whole hypothesis is wrong. From pg. 17:

For any given market, it can be argued that consumers will spend their expendable
income regardless of what it is on. If the NBA season is not around, then fans will find a new
way to transform their earnings into something else. Looking at Oklahoma City and the Thunder
in particular, “Each missed game likely would mean a little bit less tax revenue for Oklahoma
City, said Doug Dowler, the city's associate budget director. But because the city is already
ahead of projected sales tax revenue growth of four percent for this fiscal year, losing Thunder
home games would likely only make a small dent in Oklahoma City's robust numbers. The
largest impact would likely be an increased subsidy for the arena, but by how much is not yet
known, and it would not likely cause many problems within the city's $920 million budget for
fiscal year 2012”

and pg. 18:

My arguments that
the presence of the Thunder to Oklahoma City would prove to be a good driver of talent, wealth,
and intellectual accumulation to not only the city but the state as a whole while complementing
job creation as well as boost the region’s tourism sector and thus the overall state of the economy
all the while leaving the city which was abandoned by the franchise (in this case, Seattle severing
ties with the Supersonics) with a sizeable financial, capital, and intellectual hit. I was wrong

I agree Laramie, this was a good read. Thanks for supporting my point.

[Dob Hooligan]

This paper seems to confirm that the Thunder don't really have a big economic impact on the city. In fact, he finds that his whole hypothesis is wrong. From pg. 17:



and pg. 18:



I agree Laramie, this was a good read. Thanks for supporting my point.

So, what makes an exciting, vibrant city? Are you suggesting anything that changed OKC from the United Airlines facility failure to today is just normal, quantifiable economic growth?

[Laramie]

So, what makes an exciting, vibrant city? Are you suggesting anything that changed OKC from the United Airlines facility failure to today is just normal, quantifiable economic growth?

The United Airlines facility failure was the 'gut punch' that led to former Mayor Ron Norick establishing the format that led to MAPS.

Remember how impressed voters were with the Bricktown Ballpark; hopefully we'll see some designs of our new Billion dollar
arena and recognize our elevation to the 'Big Leagues.'

[PoliSciGuy]

What "Big Leagues"? What material benefits come from being in those "Big Leagues"? We're throwing around vague concepts and soft talking points without actually empirically backing them up (and in some cases even posting content that disproves them). We're talking about $1b here, money which could be spent in so many other places for so many other institutions and facilities. If this is a good investment, let's see the numbers backing it up.

[Dob Hooligan]

What "Big Leagues"? What material benefits come from being in those "Big Leagues"? We're throwing around vague concepts and soft talking points without actually empirically backing them up (and in some cases even posting content that disproves them). We're talking about $1b here, money which could be spent in so many other places for so many other institutions and facilities. If this is a good investment, let's see the numbers backing it up.

I think we're in "dueling talking points" mode. Show us the numbers disproving it. And what are all those other institutions and facilities?

[chssooner]

What "Big Leagues"? What material benefits come from being in those "Big Leagues"? We're throwing around vague concepts and soft talking points without actually empirically backing them up (and in some cases even posting content that disproves them). We're talking about $1b here, money which could be spent in so many other places for so many other institutions and facilities. If this is a good investment, let's see the numbers backing it up.

Aren't intangible and qualitative similar, in that they inherently can't be defined? What price can you put on having 20,000 people downtown at minimum 41 nights a year, having a brand known nationally and seen by millions on TV, and having your city seen on national TV? It's hard to define, but publicity like that isn't just available to every city. And cache also matters. Big league city is a moniker that not every city can have. Think Louisville or Omaha wouldn't kill to have a pro team? Think again.

[BDP]

This paper seems to confirm that the Thunder don't really have a big economic impact on the city. In fact, he finds that his whole hypothesis is wrong. From pg. 17:.

Yeah, but we don't even know what grade the author got on his thesis. lol

There are a lot of weird broad based metrics and specious correlations in that. Probably wasn't a good hypothesis to think that Seattle would take a big hit financially and in population growth just because of the basketball team. Discussing single variable metrics in a macroeconomic analysis is always going to be messy at best.

For example, the Thunder moved here in 2008. The OKC GDP has increased by 42% since then*. There was a slight dip that first year, but they weren't that good. There was another dip in 2020, but they didn't finish the season in OKC. But other than that, it's been decent increases most years. Therefore, the Thunder grew OKC's economy significantly since the team has been here.

Of course, that's a totally ridiculous conclusion, but it's similar to looking at population growth between the two cities after the move and attributing any changes to that single variable, especially since it's impossible to control for that variable in individual markets while keeping all other variables in a macroeconomic system (i.e. the cities' markets) constant.

*https://fred.stlouisfed.org/series/NGMP36420

[PoliSciGuy]

I think we're in "dueling talking points" mode. Show us the numbers disproving it. And what are all those other institutions and facilities?

That's...not how logic works. Mayor Holt and other stadium proponents are the ones making the claim that this city funding for a new arena is a good investment, it is thus incumbent upon them to provide proof to back those claims up. But I've also posted numerous studies here that show that stadiums in general do not earn back their investment. Start here: https://papers.ssrn.com/sol3/papers....act_id=4022547

As for other institutions, just look at numerous other threads on this forum. What do you think our rapid transit could do with a few extra hundred million? Our trails? Our support for the homeless or those dealing with unaffordable housing? What sort of support could we provide for those with mental illness, or an overworked police force? If we're gonna be hosting some Olympics events at the end of the decade, what investments can we make now to really knock visitors' socks off when they visit and ensure we have the infrastructure for them?

Aren't intangible and qualitative similar, in that they inherently can't be defined? What price can you put on having 20,000 people downtown at minimum 41 nights a year, having a brand known nationally and seen by millions on TV, and having your city seen on national TV? It's hard to define, but publicity like that isn't just available to every city. And cache also matters. Big league city is a moniker that not every city can have. Think Louisville or Omaha wouldn't kill to have a pro team? Think again.

Spending $1b on vibes and intangibles alone is a really, really bad idea.

Those 20,000 people don't just appear out of nothingness when the Thunder play, they just find other things to do and still come downtown. They still spend their recreation money on recreation and nights out, only it might mean a movie or dinner out or catching an extra Dodgers game or going to a concert at Paycom or going to a musical at the Civic Center, etc.

As for Big League city, I'd still love to see what exactly that means. Is Sacramento a Big League City? Milwaukee? Austin? Portland? Cleveland? Memphis? Detroit?

[April in the Plaza]

Yeah, but we don't even know what grade the author got on his thesis. lol

There are a lot of weird broad based metrics and specious correlations in that. Probably wasn't a good hypothesis to think that Seattle would take a big hit financially and in population growth just because of the basketball team. Discussing single variable metrics in a macroeconomic analysis is always going to be messy at best.

For example, the Thunder moved here in 2008. The OKC GDP has increased by 42% since then*. There was a slight dip that first year, but they weren't that good. There was another dip in 2020, but they didn't finish the season in OKC. But other than that, it's been decent increases most years. Therefore, the Thunder grew OKC's economy significantly since the team has been here.

Of course, that's a totally ridiculous conclusion, but it's similar to looking at population growth between the two cities after the move and attributing any changes to that single variable, especially since it's impossible to control for that variable in individual markets while keeping all other variables in a macroeconomic system (i.e. the cities' markets) constant.

*https://fred.stlouisfed.org/series/NGMP36420

For reference, it looks like Tulsa’s GDP is up 33% over the same period.

Although Wichita is up by ~47% and Omaha is up by 69%!

[Pete]

Spending $1b on vibes and intangibles alone is a really, really bad idea.

I know it won't matter to you one bit, but vibes and intangibles are exactly why this will pass in a landslide.

It's not about numbers and the bottom line... It's about civic pride and community self-esteem. And when you are Oklahoma City with very little to hang your hat on, that matters a lot.

I was living in L.A. when the Thunder got to the NBA finals and from that point forward nobody I met ever kidded me about being from a cowtown or thought there were still teepees everywhere. And I hate to tell you that when I went to graduate school at Pepperdine and people found out I went to the University of Oklahoma, the reaction was somewhat reverential because absolutely everyone had heard of OU and assumed it was a big, good school. And that was totally due to the football team, of course.

You simply cannot buy that type of PR, and almost everyone voting in this election understands that.


You are 100% entitled to your opinion and can post all the studies you want, but it seems you are missing the point.

[PoliSciGuy]

Sure, and I’ve said multiple times I expect it to pass, probably by 66%-33% or so

[BDP]

For reference, it looks like Tulsa’s GDP is up 33% over the same period.

Although Wichita is up by ~47% and Omaha is up by 69%!

To be fair, the Oilers, Wichita Thunder, and Omaha Heart have always punched above their weight as economic generators.

[Pete]

Sure, and I’ve said multiple times I expect it to pass, probably by 66%-33% or so

Think of it more like MAPS... Especially the first 3 go-rounds were all shiny, sexy projects that gave the outward impression that things in this town were moving forward.

They were all things that citizens could see and touch and use and point at with pride.

This is basically another big MAPS project and as with all of those, the whole point was they would be paid for and debt free and then be a long-term asset -- often with negative cost or very little new income -- to the City.

[BDP]

As for other institutions, just look at numerous other threads on this forum. What do you think our rapid transit could do with a few extra hundred million? Our trails? Our support for the homeless or those dealing with unaffordable housing? What sort of support could we provide for those with mental illness, or an overworked police force? If we're gonna be hosting some Olympics events at the end of the decade, what investments can we make now to really knock visitors' socks off when they visit and ensure we have the infrastructure for them?

The good news there is that resources have been and are still being spent on those issues. I haven't seen the ballot measure yet, but I haven't heard anything that indicates the concept is to pull funding from those areas for this project. Opportunity cost is a thing, but that can be a consideration in every dollar spent.

Those 20,000 people don't just appear out of nothingness when the Thunder play, they just find other things to do and still come downtown. They still spend their recreation money on recreation and nights out, only it might mean a movie or dinner out or catching an extra Dodgers game or going to a concert at Paycom or going to a musical at the Civic Center, etc.

They can go to a Dodgers game, a concert downtown, or a musical at the civic center because of public investment made over time based on the the idea that the vibe of having cool stuff to do in the city is important for the intangible benefits it has to the quality of life of the community. Public money has always been used to improve the "stuff to do" factor in communities.

[BDP]

The United Airlines facility failure was the 'gut punch' that led to former Mayor Ron Norick establishing the format that led to MAPS.

Pretty much the response was "you can't pay us to come there, because there's nothing to do."

This is simply a continuation of the response to that. Like Pete said, it is the next step in the MAPS progress.

[PhiAlpha]

I know it won't matter to you one bit, but vibes and intangibles are exactly why this will pass in a landslide.

It's not about numbers and the bottom line... It's about civic pride and community self-esteem. And when you are Oklahoma City with very little to hang your hat on, that matters a lot.

I was living in L.A. when the Thunder got to the NBA finals and from that point forward nobody I met ever kidded me about being from a cowtown or thought there were still teepees everywhere. And I hate to tell you that when I went to graduate school at Pepperdine and people found out I went to the University of Oklahoma, the reaction was somewhat reverential because absolutely everyone had heard of OU and assumed it was a big, good school. And that was totally due to the football team, of course.

You simply cannot buy that type of PR, and almost everyone voting in this election understands that.


You are 100% entitled to your opinion and can post all the studies you want, but it seems you are missing the point.

Yes to all of this. I was in college when the Thunder arrived. In the constant fraternity city vs city pissing contest between OKC, Tulsa, Dallas, etc. guys...people's attitudes toward OKC vs. Tulsa started to change significantly when we got the team. Friends from Dallas/Ft worth of course always have and always will think Dallas and Texas are the greatest places on earth but when we got an NBA team and it started routinely beating the Mavs...it added a new legitimacy that OKC never had previously and gave all of us from OKC something to throw in the Dallas crew's face a few times a year. It also significantly reduced the "there's nothing to do in OKC" mentality no matter how wrong it still was prior to the Thunder arriving. Attitudes about the city change significantly after 2008 and if you think otherwise, you just haven't been paying attention.

It all sounds stupid on the surface but among my generation that vividly remember growing up in OKC when it was a trash heap with literally nothing to do downtown (or really anywhere) and listened to it constantly be sh*t on by those who weren't from here, merely having the Thunder has become a huge source of civic pride. Having nice things is great, but Wichita, Colorado Springs, Tulsa, Omaha, Albuquerque, Birmingham, Cheyenne, Santa Fe, Virginia Beach, Louisville, Hartford, and a number of other cities all have nice things. Only 32 cities have an NBA team, 52 cities have a professional sports franchise, 41 have a big 3 franchise...which group would you rather OKC be mentally associated more closely with: those places or a group that includes Denver, LA, Chicago, Salt Lake City, NYC, Miami, Dallas, Indianapolis, San Francisco, Boston, New Orleans, San Antonio, Brooklyn, Philadelphia, etc?

All of that is why I almost want to fight people who act like we don't need the team, don't need an arena, etc. and I'm far from alone in that. Many of us who care take it very personally. The Thunder have had a massive impact on the city, even if some people here don't care whether we have a team or have a vendetta against wealthy people or whatever. If you don't want to continue to pay the same tax we have for 30 years to help build a better arena and ensure the team stays here...there are plenty of cities without professional sports that you're welcome to move to.

[Pete]

Just wait until we get Olympic events in 2028 and every single shot shows the whitewater facility, Boathouse Row, and the skyline in the background.

There is simply nothing other than big-time sports that create that type of exposure and immeasurable goodwill.

[Mississippi Blues]

I know it won't matter to you one bit, but vibes and intangibles are exactly why this will pass in a landslide.

It's not about numbers and the bottom line... It's about civic pride and community self-esteem. And when you are Oklahoma City with very little to hang your hat on, that matters a lot.

I was living in L.A. when the Thunder got to the NBA finals and from that point forward nobody I met ever kidded me about being from a cowtown or thought there were still teepees everywhere. And I hate to tell you that when I went to graduate school at Pepperdine and people found out I went to the University of Oklahoma, the reaction was somewhat reverential because absolutely everyone had heard of OU and assumed it was a big, good school. And that was totally due to the football team, of course.

You simply cannot buy that type of PR, and almost everyone voting in this election understands that.


You are 100% entitled to your opinion and can post all the studies you want, but it seems you are missing the point.

In my experience, it’s still pretty popular for outsiders to think Oklahoma City is a cowtown without much to do if you don’t like the rodeo or going to a klan rally. That’s not to say I don’t come across people that genuinely have a good perception of Oklahoma City and it’s great when people are able to identify the Thunder as something notable mostly because I love the NBA so I can talk about that a lot, but it still doesn’t change what many folks apathetic to the NBA think since Oklahoma City is still tied to Oklahoma as a state in many people’s minds. Tornadoes and Native American’s, in my anecdotal experience, are brought up more than the Thunder, which are interesting subjects to talk about and I’m always happy to discuss it, but they carry baggage in their own right.

I support the arena and your insights into the finances have been great per usual, but I feel like you kind of made PoliSci’s point with the OU example. All that perception of the University of Oklahoma being a big, good university due to its football or softball or gymnastics, etc, yet there are still many ways it fails to satisfy those perceptions for many. Of course, then it has to be acknowledged how the perception around OU’s athletics has benefited the university that it otherwise wouldn’t if not for prestigious athletics.

I’m probably just stating the obvious but it seems like that’s the biggest disconnect when I see this debate in various mediums; one side is interested in the perception of how money spent can make a city or program appear and bring in outside interest, whereas the other side is interested in how the finances work in the operational sense to improve the material conditions of the citizens. It reminds me a lot of the “form (ever) follows function” in architecture that was popularized by modernist architects looking to cease the excessive ornaments of past architecture in favor of a minimal architecture that could improve the living conditions in a post-WWII society. Should a building be designed to include functionless details for visual appeal, or should the building be designed solely for the function of those living in or using the building? Interesting stuff to think about.

[Pete]

^

But almost everyone knows OKC has an NBA team, so even though many don't know the difference between Tulsa, Wichita, and any number of fly-over cities, they absolutely know cowtowns don't get top-flight pro sports franchises.

Mayor Holt loves to go into excessive hyperbole about all this be he is right about one thing: You are either a Big League City or you are not. And since we only have one Big League team, losing it would be catastrophic to our reputation and our own self-esteem.

I say all that while being pretty indifferent about the NBA; I just care about what the Thunder means for the city I love.

[jdross1982]

The increased valuation is directly tied to the increase in revenue/cash flow/profit. The owners are making money and substantially more money than they were in 2006.

That isn’t the entire story. Several posts about how the new arena increases the value of the team. The increased value doesn’t solely come from increased sales (tickets/suites/concessions) it comes from a new arena period.